The good, bad, and ugly of binary thinking

The good, bad, and ugly of binary thinking

Sometimes the best choice when you come to a fork in the road is to retreat, or even merge the two forks by taking one then going off road to the other! And yet binary thinking will force us to choose between the right or left fork, even if both forks suck standing alone. Only by understanding the perils of binary thinking can you protect against its destabilizing bipolar effects in conflict resolution.

First, the good. Binary logic is what makes many computer software programs run. The logic of going between “0” and “1” on streams of code is what gives direction to hardware. Not only that, but compact discs use the same logical geography to play music. Plus, in some cases, as Professor Steven Pinker points out in How the Mind Works or Malcolm Gladwell in Blink, binary logic helps us decide, often in split seconds, between: fight or flight in a dark alley, taking one fork in the ski slope or another, one moral decision as opposed to another in our relationships.

Second, the bad and ugly. The same logic that helps us make split second decisions in dark alleys also causes disaster in conflict resolution. In most but not all legal disputes I have handled, binary thinking keeps each side stuck in their black and white view of the law and facts, like the gun men pictured above. In most cases, both sides are right, and wrong, in different respects. (In others, there is a right, and a wrong, but that is quite rare.) As pointed out by Mr. John Kenneth Galbraith about the Myth of Consumer Sovereignty in The Affluent Society, rational decision making often gets irrational because consumers make decisions based on their perceived necessary choices — not their actual available choices.

The same goes with decision making in conflict resolution. Take negotiations between Democrats and Republicans. Labeling an idea “Republican” or “Democrat” can change an otherwise great idea in a split second into a horrible idea, depending on the listener’s prejudice. This is so even though each party may claim to have the same stated goal, such as less American unemployment. Rather than considering the idea with an open mind, the political listener shoves the idea into one pigeonhole or the other, even when the idea doesn’t fit into either hole, and then smashes it. Alternatively, the listener blasts the idea because it doesn’t fit into either hole. In so doing, yesterday’s distrust taints the new today. Thus, the circle of distrust is continued, as recounted in Politics of Distrust, which shows that, as of 2012, only 22% of Americans trust government.

While binary thinking can help us survive, it can, at other times, be deadly. Such thinking blinds us to innovative solutions available outside the binary system we desperately cling to. By considering these solutions, the two forks in the road can merge more often towards common goals.

Thank goodness for plain English.

Thank goodness for plain English.

Many love streaming their favorite artist’s songs over Pandora, Inc. (“Pandora”). Imagine a world where your favorite song, say “All Along the Watch Tower” by Bob Dylan, wasn’t listed on Pandora because┬áthe American Society of Composers, Authors, and Publishers (“ASCAP”) made his compositions unavailable to “New Media” outlets, even though his songs are available for license to traditional methods of distribution, like the radio. Keep calm. Thanks to a recent ruling by ┬áthe Southern District of New York, a federal court in New York, that won’t happen. And that’s primarily because of plain English.

In In Re Petition of Pandora, Media, Inc., ASCAP argued that it could not make all compositions available in its repertory to licensees like Pandora where the publisher of the song withdrew ASCAP’s right to license the compositions to “New Media.” In short, ASCAP argued to the Southern District of New York, that it cannot license what it does not have the right to license.

Since 1941, ASCAP has needed to comply with an antitrust consent decree. Luckily, it states in plain English that music users have the right to “perform any, some or all of the works in the ASCAP repertory.” If Mr. Dylan uses ASCAP to collect royalties for the public performances of “All Along the Watchtower,” that song is part of the ASCAP repertory. Under the decree, ASCAP must make the song available to all requesting music users, regardless of the type of medium they use to distribute the music.

The court correctly ruled that while Mr. Dylan may freely pull his song out of the ASCAP repertory and go to another performing rights society, ASCAP is restricted by the decree from offering Mr. Dylan the option of licensing his songs to some distributors but not to others in “New Media” — such as Pandora. But Pandora has only won half the battle with ASCAP. The decree still requires the court to determine the rate that Pandora will pay for using ASCAP’s stable of songs. If the court makes these rates cost prohibitively high, Pandora’s first half victory will be a moot one.

You’re fired! (But I still have to pay you?)

You’re fired! (But I still have to pay you?)

We often think that if we fire someone, they are no longer entitled to be paid. But that is not always so. This is especially true in Hollywood, as can be seen from the recent ruling in the litigation between Lisa Kudrow and Scott Howard, her former manager, reports the Hollywood Reporter. While Ms. Kudrow fired Mr. Howard, he claims he is still entited to a percentage of her income even though they had no written agreement giving him such a right. Is this is a stretch? Yes and no.

Generally speaking, agreements can be for a term or at will. If they are for a term, say five years, they cannot usually be terminated before the term unless it is for cause — which means one of the parties breached the contract. If the agreement is at will, it can be terminated at anytime. Most agreements are at will. Regardless of which agreement you enter into, you can always negotiate for residual rights that exist after termination. For example, if you manage Mick Jagger and give him a management agreement which gives you the right to 5% of this income for five years even after the term of the agreement is over, which is called a “sunset clause,” then you get paid even when he is touring and you are no longer his manager.

The crinkle in Ms. Kudrow’s case is that there is no written agreement. Instead, the parties only had a verbal understanding of their relationship. This makes for tough proof at trial concerning the contours of this agreement. That’s why Mr. Howard sought to introduce what is called “custom and usage” evidence in the trial court. This evidence basically shows that some rule is so widely known in an industry and accepted that a party consents to the rule in any contract even if it isn’t explicitly written — or said — in the contract. The lower court rejected this argument because, in its view, the proffered expert in the case only entered the industry in 1998, which is after the parties made their agreement in 1991. The appellate court reversed and allowed the testimony.

Whether Mr. Howard wins at trial remains to be seen. However, in allowing the testimony of a custom and usage expert such as this one, the appellate court signaled to the entertainment industry that it is better to specifically contract out of these type of sunset clauses or else they may be presumed to exist in your contract even if it is not so written.